The early days of Starbucks and Red bull reveal something about innovation.
Rajesh Srinivasan
Founder - Mindful Marketing | Strategy Consultant | 3x Author | Keynote Speaker | Reach out for your Strategic Planning sessions.
How a trip to Italy changed Starbucks destiny?
In 1971, The first Starbucks store emerged in downtown Seattle. During the initial years, the brand only sold roasted whole coffee beans. They did not brew and served espresso yet.
Howard Schultz, Starbucks CEO's casual trip to Italy in early 1983 changed the company's destiny.
As Schultz walked along the streets of Milan, he was blown away by the connection between the Italian people and Italian coffee bars. He witnessed the romance between Italian coffee drinkers and their coffee.
Wherever Schultz found coffee, there was a lively community and deep human connection.
People were popping in and out of the coffee shops quite frequently at all hours of the day for that much-loved expresso.
A sudden flash came into Schultz's mind - there was no such coffee bar experience in America. He raced back to Seattle with this idea and repositioned Starbucks as 'The Third Place' - an espresso coffee bar centred around human connections.
The brand has grown significantly after Schultz repositioned Starbucks like an Italian expresso bar and soon became the largest coffee-house chain in the world.
Today Starbucks has around 32,660 stores with a revenue of 4.2 billion US dollars.
Redbull's story is somewhat like Starbucks.
One hot day in Bangkok, Dietrich Mateschitz, an Austrian Sales executive who was in Thailand to sell toothpaste, took a ride on a tuk-tuk, the local bicycle taxi.
He saw that his driver and others in the city were all drinking a specific mix to keep up their energy levels, and he enquired the name of the drink.
Everybody told it was Krating Daeng. His hotel manager later informed him it denoted Red Bull in English.
Mateschitz later patented the idea, named his new brand as Red Bull and started marketing it as an energy drink in the Western markets. It soon became a great success.
Today Red Bull sells more than four billion cans a year and Mateshchitz is the richest Austrian on the planet.
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The stories of Red Bull and Starbucks tell us something important about the network structure of ideas and how innovation happens.??
When Dietrich Mateschitz introduced Red bull in Europe and America, it was lauded as the world’s first energy drink, not as an adaptation of the tuk-tuk drivers’ favourite drink.?
Similarly, Americans found the Starbucks coffee shop experience unusual and new.?
According to Richard Koch, a former Strategy Consultant and Author of the book - Super connect, "Distance gives respectability to ideas; it makes copying look like innovation."
Let us remember that there is nothing unique and novel in the world. Everything emerges from something that already exists.
Long before Naukri came, jobs were advertised in the Classifieds section of the newspapers. Naukri took the existing idea and executed it in a different place - online.
The Founders of Flipkart and Ola imported the ideas from their Western counterparts Amazon and Uber.
Café Coffee Day is also an astute emulation of Starbucks.
I am not ridiculing these entrepreneurs but admire them for their knack for seeing the gap that exists in the market.
Pablo Picasso said, 'Good artists copy; great artists steal.'
In that sense, innovative entrepreneurs are artists.
They take an already successful idea from a different place and reposition it in a different location or platform.
The best thing about this kind of innovation is the possibility of failure is negligible.
-I am a Marketing Strategist and human behavioural analyst. My love for deep research allows me to see marketing, branding and innovation in a new light.
As a keynote speaker, I speak at various business forums and industry events to share my observations.
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Design Thinking for making Marketing Customer Centric|Coalescing Brand and Performance for Customer Lead Business Growth| MarTech and Adtech Expertise to evangelise Customer Journey |Data Intelligence |@IIMB|@MIT
2 年My thoughts A similar narrative can be used for the success of Flipkart Amazon MakeMyTrip etc.. But if we try finding the LCM of all the success stories mentioned is the Creation of Subcategory coupled with 1st mover advantage in short you are the category in self. But challenges is to become a category leader isnpite of not being the category founder or having the 1st mover advantage. How many success stories can we find in there? Possible Google , Xerox are few Rajesh Srinivasan
Social Sector | Public Policy - ISB AMPPP 2024-25 | Hospitality | Agriculture | Real Estate | B.E - RIT | ExEd - IIMA, IIMK, ISB, LSE |
2 年This is a great reinforcement for me Rajesh Srinivasan I was fortunate to listen to Professor Jay Rao in recent times, challenging our ingrained thinking about innovation as breakthrough, never existed, etc. He pointed out two important empirical evidences. One, innovation is also incremental and forms major part of growth during product PLC. Two, anchor your senses ALERT to what day-to-day experiences are unleashing..... Emulate those as part of your innovation.... He cited how the great Steve Jobs applied this in his maverick invention journey. Thanks for those passionate hours of delivery Professor Jay Rao ??
Mentor & Adviser , Speaker , Writer
2 年Very interesting writeup Mr Srinivasan. It signifies our indian thinking keep your ear eye open all the time ,????
Head of Marketing @ KGOC Global | Host, Marketing Demystified
2 年Rajesh Srinivasan. Great read. It should be shamelessly steal!!